“Trade what you see; not what you think.” – The Old Fool,
Richard McCranie, trader extraordinaire.
“The big money is not in the buying and selling. But in
the waiting.” - Charlie Munger, Vice Chairman, Berkshire Hathaway
“This country was founded by the bayonet;
it survives by the ballot. Those who
falsely disparage the honesty of our elections are striking a blow at the
foundations of our nation and should be charged with sedition.” – Meade Stith
“In my decades of investing experience, I have not seen
such mindless and uninformed speculation as I have witnessed recently. Indeed, in nominal
dollar terms...it is far in excess of the dot.com boom.” – Doug Cass.
EMPIRE STATE MANUFACTURING (Advisor Perspectives)
“This morning we got the latest Empire State Manufacturing
Survey. The diffusion index for General Business Conditions at 17.4
was an increase of 5.3 from the previous month's 12.1.... Business activity
grew at a solid clip in New York State, according to firms responding to the
March 2021 Empire
State Manufacturing Survey.” Commentary and charts at...
INFLATION IS POISED TO SOAR, 3% BY JUNE IS “ALMOST
CERTAIN” (Mishtalk)
“Headline CPI inflation is almost certain to rise above
3% in June and July, according to Jeffrey Gundlach. It could even top 4%, he
said, which would “really
spook the bond market...” ...“It’s shocking that households with
$150,000 of income and three children will get $6,000 from the government,”
he said, in reference to the $1.9 trillion stimulus. “This looks a lot like a
monetizing experiment.” Commentary at...
https://www.thestreet.com/mishtalk/economics/inflation-is-poised-to-soar-3-by-june-is-almost-certain
YELLENS “GO BIG” MMT MAY DISAPPOINT (Real Investment
Advice)
“Modern Monetary Theory is a macroeconomic theory that
contends that a country that operates with a sovereign currency has a degree of
freedom in their fiscal and monetary policy which means government spending is
never revenue constrained, but rather only limited by inflation.” – Kevin
Muir. So, there you have it. Debts and deficits do not matter as long as the
Government can print the money it needs to pay for its wants... The lesson not
learned by economists and elected leaders is that stimulus, derived from debt,
gets used for non-productive purposes. Such only succeeds in further inhibiting
economic prosperity in the future.
Yes, Janet Yellen has a “go big” MMT dream. However,
the risk of a “rude awakening” is high in that
it delivers inflation, exacerbates income inequality, and increased social
instability. Such was the result in every other country
which has run such programs of unbridled debts and deficits.” Lance Roberts.
Commentary at...
https://realinvestmentadvice.com/macroview-yellens-go-big-mmt-plan-may-disappoint/
EXPLODING BUDGET DEFICIT (MishTalk)
“CBO also projects that four major trust funds will be
insolvent in the next 14 years. The Highway Trust Fund would become insolvent
in 2022, the Medicare Hospital Insurance trust fund would run out in 2026, and
the Social Security Old Age and Survivors Insurance and Disability Insurance
trust funds would run out in 2032 and 2035, respectively. The hypothetical
combined Social Security trust fund would run out in 2032...” Commentary at...
https://www.thestreet.com/mishtalk/economics/a-grim-look-at-the-exploding-us-budget-deficit
CORONAVIRUS (NTSM)
Here’s the latest from the COVID19 Johns Hopkins website
as of 5:30pm Monday. US total case numbers are on the left axis; daily numbers
are on the right side of the graph with the 10-dMA of daily numbers in Green.
The big jump last Friday was probably due to a reporting
lag rather than a real jump in new cases.
MARKET REPORT / ANALYSIS
-Monday the S&P 500 rose
about 0.7% to 3969.
-VIX fell about 3% to 20.03.
-The yield on the 10-year
Treasury lipped to 1.610%.
14.0% of all issues traded on the NYSE made new, 52-week
highs when the S&P 500 made a new all-time-high today, 15 Mar. This is a
good number that gives no hint of a lack of breadth or a coming pullback.
There have been 5 straight up-days so Tuesday would be
expected to be down – markets don’t go up forever. Still, on a longer-term
basis, we’ve seen 6 up-days over the last 10-days. and 9 up-days over the last
20 days. These are not particularly negative in the near/intermediate term.
The daily sum of 20 Indicators
slipped from +10 to +8 (a positive number is bullish; negatives are bearish);
the 10-day smoothed sum that smooths the daily fluctuations improved from +22
to +34 (These numbers sometimes change after I post the blog based on data that
comes in late.) Most of these indicators are short-term and many are trend following.
The Long Term NTSM indicator ensemble
declined HOLD. Price is bullish; Sentiment, Volume & VIX are
neutral.
There are not many negative
signs around. The S&P 500 remains relatively stretched above its 200-dMA. I
think that will remain stretched. Investors are focusing on the unprecedented
fiscal stimulus and the extreme FED-support keeping interest rates down.
I remain bullish.
MOMENTUM ANALYSIS:
TODAY’S RANKING OF 15 ETFs
(Ranked Daily)
The top ranked ETF receives
100%. The rest are then ranked based on their momentum relative to the leading
ETF.
*For additional background on
the ETF ranking system see NTSM Page at…
http://navigatethestockmarket.blogspot.com/p/exchange-traded-funds-etf-ranking.html
MONDAY 2-MONTH GAINS
TODAY’S RANKING OF THE DOW 30
STOCKS (Ranked Daily)
Here’s the revised DOW 30 and
its momentum analysis. The top ranked stock receives 100%. The rest are then
ranked based on their momentum relative to the leading stock.
For more details, see NTSM
Page at…
https://navigatethestockmarket.blogspot.com/p/a-system-for-trading-dow-30-stocks-my_8.html
MONDAY 2-MONTH GAINS
MONDAY MARKET INTERNALS (NYSE
DATA)
Market Internals remained BULLISH on the market. Market
Internals are a decent trend-following analysis of current market action, but
should not be used alone for short term trading. They are usually right, but
they are often late. They are most
useful when they diverge from the Index.
Using the Short-term indicator
in 2018 in SPY would have made a 5% gain instead of a 6% loss for buy-and-hold.
The methodology was Buy on a POSITIVE indication and Sell on a NEGATIVE
indication and stay out until the next POSITIVE indication. The back-test
included 13-buys and 13-sells, or a trade every 2-weeks on average.
As of 9 March, my stock-allocation
is about 60% invested in stocks. You may wish to have a higher or lower %
invested in stocks depending on your risk tolerance. 50% is a conservative
position that I consider fully invested for most retirees.
As a retiree, 50% in the stock
market is about fully invested for me – it is a cautious and conservative
number. If I feel very confident, I might go to 60%; if a correction is deep
enough, and I can call a bottom, 80% would not be out of the question.
The markets have not
retested the lows on recent corrections and that left me under-invested on the
bounces. I will need to put less reliance on retests in the future.
